Monday, July 29, 2013

Katelin P. IsaacsAnalyst in Income Security
Julie M. WhittakerSpecialist in Income Security

“Sequestration”
refers to a process of automatic, largely across-the-board spending reductions under
which budgetary resources are permanently canceled to enforce certain budget
policy goals. Most recently, sequestration was triggered by the Budget
Control Act of 2011 (BCA; P.L. 112-25) and implemented on March 1, 2013
(delayed by P.L. 112-240).

Some, but not all, types of unemployment insurance (UI) benefits are subject to
reductions under the BCA sequester. Regular Unemployment Compensation
(UC), Unemployment Compensation for Ex-Servicemembers (UCX), and
Unemployment Compensation for Federal Employees (UCFE) benefits are
specifically exempt from the sequester reductions. UI payments from the Extended
Benefit (EB) and Emergency Unemployment Compensation (EUC08) programs, however,
are subject to the sequester reductions. States administer all types of UI
benefits. Therefore, states are responsible for carrying out the sequester
reduction in UI benefit payments. The amount and method by which a UI
recipient’s benefit is reduced varies by the state and by the date when
the reduction begins.

Additional information on modifications to UI programs and benefits as a result
of recent changes to state laws is available in CRS Report R41859, Unemployment
Insurance: Consequences of Changes in State Unemployment Compensation Laws,
by Katelin P. Isaacs.

More general information on the sequester is available in CRS Report R42050, Budget “Sequestration”
and Selected Program Exemptions and Special Rules, coordinated by Karen Spar.

Date of Report: July 2, 2013
Number of Pages: 9Order Number: R43133Price: $19.95

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